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That bitcoin exchange that CME plans to use for futures? It's down.

(Bloomberg) — This is exactly what the bitcoin futures naysayers have been warning about: One of the exchanges which CME Group Inc. would use to price the contracts is having serious issues.

Clients of San Francisco-based Kraken are seeing slow responses from the website, connection timeouts and delays in withdrawals, the cryptocurrency exchange said in a statement. "We are investigating these issues and working to resolve as quickly as possible," the statement said.

Problems in the fifth-biggest exchange by bitcoin trading volume come just three days after Seoul-based Bithumb’s servers crashed as a sudden surge in usage caused a connection failure. The issues raise concerns about whether largely unregulated exchanges, without the safeguards of securities bourses, will be able to reliably provide prices for indexes tied to futures and exchange traded funds, and cope with higher trading volume that could come if institutional investors start buying cryptos.

The other crypto exchanges on which the CME plans to base its CME CF Bitcoin Real Time Index are Bitstamp, GDAX and itBit. All four exchanges contributing prices to CME’s BRR index submitted them on time Wednesday, including Kraken, CME spokeswoman Alexandra Rapoport said in an email.

“The strength of our index is that it is based on actual prices from multiple exchanges,” Rapoport wrote. “In the case of any one participating exchange experiencing a technical issue, our reference rate is designed to draw on pricing data from the multiple other exchanges that are part of the BRR.

Interactive Brokers LLC took out a full-page ad in the Wall Street Journal on Wednesday to warn about the dangers of having bitcoin derivatives clear in the same organization as other products because, they argue, there’s no fundamental basis for valuating cryptocurrencies and there’s no mature, regulated underlying market.

Kraken clients lashed out on Twitter to complain about the problems in the exchange. Twitter user @craigwatson1987 posted "So @krakenfx is not allowing withdrawals, to add to a flaky platform where trades are hit-and-miss. Can’t move my BTC away quickly enough." Many others threatened legal action, with @thejoestore posting "everyone file for class action on Kraken!!!" and called for the U.S. Securities and Exchange Commission to investigate.

While bitcoin’s ability to skirt government and central bank controls is part of what makes it attractive to many, cryptocurrency traders and investors are now finding it might not be such a bad thing for regulators to get involved.

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